Higdon files counterclaim against JDA
The ongoing legal battle between the Grady County Joint Development Authority and Joseph W. Higdon of Higdon Furniture Company took an unexpected twist this week.
A counterclaim was filed in Grady Superior Court Monday on behalf of Higdon against the JDA. This action is in response to a law suit filed previously by the authority against Higdon in an effort to enforce a personal guarantee the senior Higdon executed to back the performance of a lease between the Higdon Furniture Company and the authority for the use of a manufacturing plant on Wight Road built specifically for the company’s use.
Through the court, the JDA is seeking $145,078.55, plus attorney’s fees from Higdon. The Quincy, Fla., based company executed a 20-year lease of the Wight Road facility at an adjustable monthly lease payment tied to the prime interest rate. However, the company filed for bankruptcy protection in November 2007.
The building was subleased for 2008 and part of 2009 to mitigate the loss of rental income from Higdon. That company has now folded and, until the Grady County commission voted earlier this year to pay down half of the debt owed on the Wight Road facility, the JDA was only able to make interest payments on the note.
JDA Attorney Thomas L. Lehman described the counterclaim of Higdon as “bizarre,” and he said he will be meeting with his client to determine an “appropriate response.”
In the Higdon counterclaim, the senior Higdon alleges the JDA and its agent, former executive director Rick McCaskill, acted in “bad faith” and “deceptively” in dealings with the defendant in the JDA’s suit.
The Florida businessman, in court documents, says the JDA negotiated a deal for Higdon Furniture Company or Joe Higdon to pay $54,380.78 (four months rent) and a $26,097.46 payment in lieu of taxes in order to satisfy all obligations from the senior Higdon to the JDA. Higdon subsequently made the $26,097.46 payment, but never the additional payment. He claims the JDA then came back with a demand “grossly in excess” of this “new agreement.”
JDA officials and Lehman contend that offers to settle the matter were made, but there was never an agreement reached on a settlement.
Higdon, through his counsel, Michael Strickland of the Moultrie law firm of Moore, Tyndall, Castellow & Strickland, also alleges that JDA Chairman Charles M. Stafford has “multiple conflicts of interest in the transaction” due to his position as chairman of the board of United National Bank.
United National Bank is just one of five local banks that jointly made the original loan to the authority for the construction of the Wight Road facility.
In his counterclaim, Higdon alleges that Stafford stands to “benefit personally from the performance of the loan.” Lehman points out that the JDA chairman would benefit no more or less than the other bankers involved in the loan.
Local officials also note that United National Bank President and CEO Michael L. Chastain handles all loans made to the authority without any involvement of Stafford.
Higdon’s counterclaim also references the JDA loan for the Higdon facility as being in “default,” which Lehman points out has never been the case.
Because of limited cash flow, the JDA did seek the five local banks’ approval to pay interest only payments until a new tenant could be found for the manufacturing facility, but those payments were made regularly on time and the loan has never been in default.
Higdon is also seeking a jury trial in the matter, attorney’s fees and damages.